Thursday, June 18, 2009

THE SILENT GRIEVENCE OF LOCAL DEFENCE PRODUCT MANUFACTURERS

There are deep concerns among the defence industry fraternity of the apparent reluctance by local end users to purchase defence related products developed and manufactured locally, for reasons best known to the users themselves. But the strange fact is that some of these products that has somehow been found unacceptable by local clients, have been found acceptable by international clients.

There are already a couple of defence related product manufacturers that has been successful in marketing their products internationally, but are faced with a myriad of issues with locals who seemed not to be too happy to deal with local manufacturers. If this is the attitude of our locals, then we have little hope of seeing the growth of the nation’s defence industries, and the blame would inadvertently fall on the government itself. The government will be seen as not having the political will to exert its policy of buy ‘Made in Malaysia Products First’, thus leaving the product manufacturers in acute difficulties of ever recovering their investments in developing the products.

I know for one that most of the local manufacturers of defence related products have invested substantially towards receiving new technologies, and to undertake research and development, and some have even acquired government R&D grants for the aforesaid purpose. But by remaining unreasonably skeptical of local products, despite the products having met the necessary approval and standards, local buyers rational for rejecting local manufactured products does not stand to valid reasons. This will only raise doubts and suspicion that there may be the element of corruption on the part of the approving authorities and by the end users, to award a preference to the purchase of imported products, rather than locally manufactured ones.

The above facts are known to many people involved in the industry, including those in the seat of power, but the comments normally heard is that ‘this country practices an open and competitive market, and it is the best product (though not necessarily cheap) that wins the contract’. It is not uncommon to hear too that some bidders of contracts will use all available ‘strings’ to get their imported products approved, against a locally manufactured product, knowing full well that they will lose out in terms of pricing.

And now there is already a loose talk among some local manufacturers that the lowest bidder may not necessarily win the bid, for they claim that the higher the price quoted, the greater the chances of winning the bid. This is indeed a strange ‘bidding policy’ (if ever there was one), and I thought that such a ‘policy’ is only apparent in some under developed countries where corruption is rampant. Certainly, the attitude and examples portrayed by some of our government officers involved in the awarding of contracts need to be closely monitored.

Finally, I would like to restate the statement that ‘our country’s defence industry is unlikely to make any substantial improvement, if our local users continue to ignore or remain skeptical of our very own locally manufactured defence products, and to continually view foreign products as the much superior product’. The possession of such mindset by locals is extremely dangerous and irrelevant, and must be totally eradicated, if we are serious in wanting to move forward in our quest to be a developed nation by 2020. The government, and in particular the Defence Ministry must also look at provisions in its policies that calls for preference to be given to locally manufactured products first, over foreign products.

And Maj Rama sir, name me that any one local company that stands on its own without any joint venture or partnership with the principal companies who called themselves as local company that produces defence products locally?

Grievances by local manufacturers do not make them less dirty than their contenders in lobbying for Mindef contracts. I supposed local manufacturers are not here if they have not secured a long term contract with Mindef, meaning they have had their piece of cake and should focus to improve themselves as long term product and service providers to the merchandise they are supplying. If they started to become greedy or ambitious to expand their product in the open market, then they have to compete in the open tenders with other contractors and cannot complaint about it.

Out there, a lot more individual companies employing ex-servicemen who are making their living by selling defence products of various principals. They too want to have their piece of cake and are working hard to lobby and to enter into defence tender processes, without less investment than the local manufacturers.

As to the question whether the element of corruption and abuse of power are involved or not, it is a separate matter. But if you ask me about it, I say you can find it yourself when you see some senior military officers are planning his retirement plan to get employed in their futuristic companies.

And out there, there are a lot more ex-servicemen who find it hard to make a living working just to strike once in winning a Mindef tender, because we have those kind of companies who are so lucky in winning Mindef tenders as if Mindef is "bapak dia punya".

The trouble with Malaysians is that we always think that MatSallehs and their products are better. I do not deny that some of their products are excellent, but I also think that we do have excellent local products too. We will have to change our mindsets